A car title loan is short-term loan that use your car title as the collateral of the loan. A short-term loan typically means a repayment period of thirty days.
With a car title loan, you can only borrow a small amount, typically to the tune of a few thousand dollars for your car. It is meant to be a short term fix for a small, quick need of money.
You give a lender the title to your vehicle for the period of time that you need the loan. Aside from the interest rate, you typically also need to pay the lender a fee for borrowing the money. So, car title loans can be expensive, but people still get them anyway especially for emergency situations. This is especially true if you do not have a fully funded emergency fund.
Should You Get a Car Title Loan?
Should you get a car title loan? That really depends on whether or not there are other places that you can borrow money from. Do you have a friend or family member who is willing to lend you money? Many people do not, and that is why they go ahead and grab the chance for a car title loan.
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If not, then you can call your creditor to discuss taking a small cash advance withdrawal on your car. If you need a quick loan to pay your bills, talk to a credit counselor for help in getting more time to pay your bills.
Understand Your Options With A Title Loan
It is important that you understand what is a car title loan and its ramifications. You should only consider loaning the title of your vehicle as a last resort in an emergency situation. Why? Because if you fail to repay, the lender will drive away with your vehicle.
Out on the Internet, you can find many websites that offer car title loans. While some lend the money directly, others act as portal websites where you only apply for a loan and then your application will be sent to different lenders.
During your application, you typically need to send the title of your car, a picture of your car, and your photo ID. There are lenders that require a copy of your car keys. Once your application is done, you will then need to wait for feedback if your application has been approved. Many local car title lenders can do the paperwork in their offices.
If a lender approves your loan application, the money will be given to you while the title of your car is kept with the lender until you repay your loan.
There are many places out there on the Internet where you can get a car title loan. Although they offer the same loan product, they differ in their interest rate, loan terms, payment period, and loan fees.
Don’t ever make the mistake of borrowing money from the first lender you encounter online. It pays to shop around. Be sure to check out car title loans in Miami for great deals on a car title loan.
Do a little bit of window shopping by sending a loan application to several lenders or by using a portal website. Compare the loans based on the terms. Once you have a lender that you can work with, that’s the only time that you should get a loan.
Take your time. Remember, a car title loan can be expensive, but it can also be a tool to use for short term cash if you need it.
Have you tried a car title loan? What was your experience with a car title loan? I’d love to hear your thoughts in the comment section below.